Labour nationalises UK banks
Gordon Brown took the momentous decision to invest about £50bn into the financial system to nationalise the majority of the UK banking system in the largest state theft in British history.
The details of the part nationalisation of UK banks are still unfolding but so far we know that the labour government will buy preference shares, the BoE will make at least £200bn available for banks to borrow under the special liquidity scheme and the government will provided a guarantee in the region of £250bn to help refinance debt.
As stated by Alistair Darling these steps are the necessary building blocks to allow banks to return to their basic function of providing cash and investment for families and business.
In the US the fed announced that they will purchase US Commercial Paper in an attempt to support the financing needs of corporations. The Fed will lend against a special purpose vehicle and the issuer will pay an upfront fee based on the commercial paper initially sold to the vehicle.
This will be in place until the 30 April unless the Board of Governors agree on an extension. Following this announcement global stock's regained some poise, however this was short lived with the S&P 500 down 5.74%, Dow Jones down 5.11% and the FTSE 100 by 0.3%.
Bernanke comments during his press conference to the National Association for Business Economists highlighted that the outlook for economic growth had worsened and the downside risks to growth had increased, this leads to a greater probability that the Fed will cut rates at their next meeting on 28-29 Oct if not before.
Furthermore the markets are predicting an even greater chance that the central banks will group together to announce a coordinated global interest rate cut. It seems that the longer this decision takes the greater the lack of confidence in the markets becomes.
The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.
The details of the part nationalisation of UK banks are still unfolding but so far we know that the labour government will buy preference shares, the BoE will make at least £200bn available for banks to borrow under the special liquidity scheme and the government will provided a guarantee in the region of £250bn to help refinance debt.
As stated by Alistair Darling these steps are the necessary building blocks to allow banks to return to their basic function of providing cash and investment for families and business.
In the US the fed announced that they will purchase US Commercial Paper in an attempt to support the financing needs of corporations. The Fed will lend against a special purpose vehicle and the issuer will pay an upfront fee based on the commercial paper initially sold to the vehicle.
This will be in place until the 30 April unless the Board of Governors agree on an extension. Following this announcement global stock's regained some poise, however this was short lived with the S&P 500 down 5.74%, Dow Jones down 5.11% and the FTSE 100 by 0.3%.
Bernanke comments during his press conference to the National Association for Business Economists highlighted that the outlook for economic growth had worsened and the downside risks to growth had increased, this leads to a greater probability that the Fed will cut rates at their next meeting on 28-29 Oct if not before.
Furthermore the markets are predicting an even greater chance that the central banks will group together to announce a coordinated global interest rate cut. It seems that the longer this decision takes the greater the lack of confidence in the markets becomes.
The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.
Labels: banks nationalisation, Bernanke, debt consolidation, FED, interest rates
posted by Wise Money @ 9:24 AM
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